The Friendly Societies (Insurance Business No. 2) Regulations 1993

Interpretation: Part IV

19.—(1) In this Part of these Regulations, unless the context otherwise requires–

“approved financial institution” means any of the following–

(a) the Bank of England,

(b) the National Savings Bank,

(c) an institution authorised, or deemed to be authorised, under the Banking Act 1987(1) or a European deposit–taker within the meaning of the Banking Coordination (Second Council Directive) Regulations 1992(2),

• (d) the European Atomic Energy Community,

• the European Bank for Reconstruction and Development,

• the European Coal and Steel Community,

• the European Economic Community,

• the European Investment Bank,

• the International Bank for Reconstruction and Development,

• the International Finance Corporation,

• the International Monetary Fund,

• the African Development Bank,

• the Asian Development Bank,

• the Caribbean Development Bank, and

• the Inter–American Development Bank,

(e) a building society;

• “approved securities” means any of the following–

  (a)

  securities issued by Her Majesty’s Government in the United Kingdom or the Government of Northern Ireland, being securities registered in the United Kingdom, Treasury Bills, Tax Reserve Certificates or Certificates of Tax Deposit;

  (b)

  securities the repayment of the principal of which, or the payment of interest on which, is guaranteed by Her Majesty’s Government in the United Kingdom or the Government of Northern Ireland;

  (c)

  fixed interest securities issued in the United Kingdom by any public authority or nationalised industry or undertaking in the United Kingdom;

  (d)

  loans to any authority to which this paragraph applies charged on the revenues of the authority or on a fund into which such revenues are payable, any fixed interest securities issued in the United Kingdom by any such authority for the purpose of borrowing money so charged, and deposits with any such authority by way of temporary loan made on the giving of a receipt for the loan by the treasurer or any other similar officer of the authority and on the giving of an undertaking by the authority that, if requested to charge the loan as aforesaid, it will either comply with the request or repay the loan:

  (e)

  The authorities to which this paragraph applies are–

  (i)

  any local authority in the United Kingdom;

  (ii)

  any authority all the members of which are appointed or elected by one or more local authorities in the United Kingdom;

  (iii)

  any authority the majority of the members of which are appointed or elected by one or more local authorities in the United Kingdom, being an authority which by virtue of any enactment has power to issue a precept to a local authority in England and Wales, or a requisition to a local authority in Scotland, or to the expenses of which, by virtue of any enactment, a local authority in the United Kingdom is or can be required to contribute;

  (iv)

  the Receiver for the Metropolitan Police District or a combined police authority (within the meaning of the Police Act 1964(3));

  (v)

  a residuary body within the meaning of section 105(1) of the Local Government Act 1985(4) ;

  (vi)

  a passenger transport executive within the meaning of section 9(1) of the Transport Act 1968(5) ;

  (f)

  any loan to, or deposit with, an approved financial institution; and

  (g)

  any securities issued or guaranteed by, and any deposits of cash with, any government, public or local authority or nationalised industry or undertaking outside the United Kingdom;

• “asset” includes part of an asset;

• “building society” means a building society within the meaning of the Building Societies Act 1986(6) ;

• “company” includes any body corporate;

• “computer equipment” means the electro–mechanical and electronic units which make up a computer configuration;

• “debenture” includes debenture stock and bonds, whether constituting a charge on assets or not, and loan stock or notes;

• “debenture option” means a right exercisable within a specified period, at the option of the holder of the right, to acquire or dispose of any debenture at a specified price;

• “debt” includes an obligation to pay a sum of money under a negotiable instrument;

• “enactment” includes any provision of Northern Ireland legislation;

• “equity share” means a share of equity share capital;

• “equity share capital”, in relation to a company, means its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;

• “fixed interest securities” means securities which under their terms of issue provide for fixed amounts of interest;

• “general business amount” has the meaning assigned to it in regulation 31(2) below;

• “general business assets” and “general business liabilities” mean respectively assets of a society or insurance company which are, for the time being, identified as representing the general business fund or funds maintained by that body in respect of its general business and liabilities of the body which are attributable to its general business;

• “general premium income” means, in relation to any body in any year, the net amount, after deduction of any premiums payable for reinsurance, of the premiums receivable by the body in that year in respect of all insurance business other than long term business;

• “industrial and provident society” means any society registered (or deemed to be registered) under the Industrial and Provident Societies Act 1965(7) or the Industrial and Provident Societies Act (Northern Ireland) 1969(8) ;

• “insurance liabilities” means, in relation to a society any debt due from, or other liabilities of the society, under any contract of insurance to which it is party;

• “intermediary” means a person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance with a society, other than a person who only publishes such invitations on behalf of, or to the order of, some other person;

• “linked assets” means, in relation to a society, long term business assets of the society which are, for the time being, identified in the records of the society as being assets by reference to the value of which property linked benefits are to be determined;

• “listed” means, in relation to an investment–

  (a)

  that the investment is included in the Official List of The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited; or

  (b)

  that there has been granted and not withdrawn a listing in respect of that investment on any stock exchange of repute outside the United Kingdom; or

  (c)

  that dealings in that investment are effected in a securities market of repute outside the United Kingdom being a market in which prices of all securities in which there are dealings are publicly listed and which are supervised by a public body;

• and “unlisted” shall be construed accordingly;

• “local authority” in relation to the United Kingdom means any of the following authorities–

  (a)

  in England and Wales, a local authority within the meaning of the Local Government Act 1986(9) ;

  (b)

  in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973(10) ;

  (c)

  in Northern Ireland, any district council;

• “long term business amount” has the meaning assigned to it in regulation 31(2) below;

• “long term business assets” and “long term business liabilities” mean respectively assets of a society or insurance company which are, for the time being, identified as representing the long term business fund or funds maintained by that body in respect of its long term business and liabilities of the body which are attributable to its long term business;

• “middle market quotation” means–

  (a)

  in relation to an investment for which two prices are quoted in the official list published for the relevant market, the average of the two prices so quoted for the relevant date or, if no official list has been published for that day, for the most recent day prior to that day for which the official list has been published; and

  (b)

  in relation to an investment for which one price is quoted in the official list published for the relevant market, the price so quoted for the relevant date or, if no official list has been published for that day, for the most recent day prior to that day for which the official list has been published; and

  (c)

  in any other case, the nearest equivalent to the average referred to in paragraph (a) above which is published or can be reasonably ascertained from the information which is published;

• “price earnings ratio” means the price earnings ratio (net) estimated in respect of the Industrial Group index of the Financial Times Actuaries Share Indices jointly compiled by the Financial Times, the Institute of Actuaries and the Faculty of Actuaries;

• “proper valuation” means, in relation to land, a valuation made by a qualified valuer not more than three years before the relevant date which determined the amount which would be realised at the time of the valuation on an open market sale of the land free from any mortgage or charge;

• “property linked benefits” means benefits–

  (a)

  provided for under any contract the effecting of which constitutes the carrying on of ordinary long term insurance business; and

  (b)

  determined by reference to the value of property of any description (whether specified in the contract or not);

• “qualified valuer”, in relation to any particular type of land in any particular area, means–

  (a)

  a person who is a fellow or professional associate of the Royal Institution of Chartered Surveyors or a fellow or associate of the Incorporated Society of Valuers and Auctioneers or a fellow or associate of the Rating and Valuation Association and either–

  (i)

  has knowledge of and experience in the valuation of that particular type of land in that particular area, or

  (ii)

  has knowledge of and experience in the valuation of land and has taken advice from a valuer who he is satisfied has knowledge of and experience in the valuation of that particular type of land in that particular area, or

  (b)

  a person who conforms with paragraph (a)(i) or (ii) above and immediately before 15th June 1981 was recognised as a qualified valuer by virtue of an approval by the Secretary of State under the Insurance Companies (Valuation of Assets) Regulations 1976(11) (and for these purposes an approval given under the Insurance Companies (Valuation of Assets) Regulations 1974(12) shall be deemed to have been given under the said Regulations of 1976);

• “relevant date” means, in relation to the valuation of any asset for any purpose for which this Part of these Regulations applies, the date when the asset falls to be valued for that purpose;

• “securities” includes shares, debentures, Treasury Bills, Tax Reserve Certificate and Certificates of Tax Deposit;

• “share” includes stock;

• “share option” means a right exercisable within a specified period, at the option of the holder of the right, to acquire or dispose of any share at a specified price;

• “traded option” means a share or debenture option in respect of which permission to deal has been granted on the traded option market of The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited, The London International Financial Futures and Option Exchange or a stock or options exchange of repute outside the United Kingdom;

• “Treasury Bills” includes bills issued by Her Majesty’s Government in the United Kingdom and Northern Ireland Treasury Bills.

(2) For the purposes of these Regulations, a body is a dependant of a society if it is–

(a) a subsidiary of that society; or

(b) a body jointly controlled by that society and another person,

within the meaning of section 13 of the 1992 Act.

(1)

1987 c. 22.

(2)

S.I. 1992/3218.

(3)

1964 c. 48.

(4)

1985 c. 51.

(5)

1968 c. 73.

(6)

1986 c. 53.

(7)

1965 c. 12.

(8)

1969 c. 24 (N.I.).

(9)

1986 c. 10.

(10)

1973 c. 65.

(11)

S.I. 1976/87; the relevant amending instrument was S.I. 1981/725; both instruments were revoked by S.I. 1981/ 1654.

(12)

S.I. 1974/2203, revoked by S.I. 1976/87.